Midsized businesses can sometimes get pushed out of the spotlight. They aren’t studied as much as today’s shiny new startups or as well-known as larger companies. However, midsized businesses are major drivers of the U.S. economy.
By some estimates, as much as one-third of private sector U.S. GDP is represented by midsized businesses, as well as over a third of all U.S. jobs. According to a report by the National Center for the Middle Market, this segment also added more than half as many employees as their large business counterparts lost in the wake of the financial crisis of 2008.
In many ways, midsized businesses are heroes of the economy, and since these businesses make a significant contribution to the economy, it is crucial to understand their concerns and the trends that affect them.
With that in mind, we launched the Midsized Business Owners Study. Three years later, we’re continuing to dissect the landscape.
The rugged landscape between Main Street and Wall Street
The cost of benefits and level of government regulation can make managing a successful midsized business a challenge. These businesses—which are expected to operate with the agility of smaller companies, but need to abide by many of the same regulations that govern larger enterprises—face a rugged terrain. For example, any midsized business could easily be confused by any of the more than 19,000 proposed changes in 2013 to laws and regulations that impact how businesses manage employees.
According to our 2014 study, midsized businesses reported the same top three concerns as in years past. This tells us two important things. First, these concerns do not appear to be going away anytime soon. And second, these concerns are all in areas that business owners can’t directly control. Midsized businesses are still figuring out where to go for help and how to deal with the challenges that can’t be contained within their company walls.
- 69% are very or extremely concerned with cost of health coverage and other benefits
Compared to 70% in 2013
- 54% are very or extremely concerned with health care reform legislation (Affordable Care Act)
Compared to 59% in 2013
- 51% are very or extremely concerned with the level and volume of government regulations
Compared to 54% in 2013
Concern levels for these issues have remained relatively even over the last three years, with a slight dip since 2013. It appears midsized businesses are getting used to these challenges, as they continue to hire and grow at steady rates. However, while our study found that half of midsized business owners and executives expected their own industries to become healthier in the next 12 months, only 15% expected the economy as a whole to improve in the same period.
One of the most interesting insights from our study is that while midsized businesses reported slightly less concern with government regulation than in years past, one third of owners and executives say they experienced unintended expenses because of non-compliance with regulations. The study showed the average number of fines was four per company; however, almost half of respondents didn’t know how many fines their companies had paid or how much they cost.
The top concerns of midsized businesses and the ‘compliance conundrum’ are just some of the important findings in our 2014 Midsized Business Owners Study, which provides unique insights into this important but understudied business segment. See the full findings of the study here, and come back to the blog for additional information and insights into the mind of the midsized business owner.
This article originally appeared on the ADP@Work Blog.